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SL can rollover debt service commitment for 2020: Cabraal

4 February 2020 12:02 am - 0     - {{hitsCtrl.values.hits}}

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  • Budget 2020 will offer a more investor-friendly agenda

By Sandun A. Jayasekera 

Many moneylenders have expressed support and we will be in a position to comfortably rollover our debt service commitment for 2020, senior economic adviser to the Prime Minister Ajith Nivard Cabraal said. 

“If we could shrink the amount in our debt servicing package for 2020, which amounts to some USD 4.5 billion (Rs.810 billion), we could make the rupee stable and prevent a devaluation which will contribute to national economic stability,” he said. 


Mr. Cabraal, who is also a former Central Bank Governor, expressed confidence that Sri Lanka would be able to reduce the debt commitment through negotiations as it was now on the right track in its economic and monetary policies under a new regime. 


“In order to achieve this objective, we are in negotiations with foreign entrepreneurs to invest their dollars in our treasury bills and bonds. It is likely that we will have to secure large-scale investors coming to Sri  Lanka and invest in government securities. At the end of 2018, we lost Rs.34 billion investments in our treasury bills and bonds. Foreign direct investments by December  31, 2019 stood a hopeless USD 600 million. This drop reflects the loss of confidence in Sri Lanka among foreign investors due to un-pragmatic, shortsighted and ad hoc macroeconomic fundamentals of the Yahapalana Government. 


“The Gotabaya Rajapaksa Government has made amendments to these disastrous policies with tax reforms, bringing down interest rates and introducing a slew of relief and benefits to investors. Budget 2020 which the government expects to present after the April general elections will offer a more investor-friendly agenda. Encouraged with new economic policies, low interest rate and strengthened rupee, I believe Sri Lanka will attract a considerable amount of FDI thus easing the debt servicing management and also reduce the debt service commitment in 2020 to lesser than USD 4.5 billion. 


“However, over the years, Sri Lanka has been able to maintain confidence among global financial agencies like the IMF, World Bank, ADB and international commercial banks by paying our debts on time and never to default,” he said.   

 “If we could shrink the amount in our debt servicing package for 2020, which amounts to some USD 4.5 billion (Rs.810 billion), we could make the rupee stable and prevent a devaluation which will contribute to national economic stability,” he said. 


Mr. Cabraal, who is also a former Central Bank Governor, expressed confidence that Sri Lanka would be able to reduce the debt commitment through negotiations as it was now on the right track in its economic and monetary policies under a new regime. 


“In order to achieve this objective, we are in negotiations with foreign entrepreneurs to invest their dollars in our treasury bills and bonds. It is likely that we will have to secure large-scale investors coming to Sri  Lanka and invest in government securities. At the end of 2018, we lost Rs.34 billion investments in our treasury bills and bonds. Foreign direct investments by December  31, 2019 stood a hopeless USD 600 million. This drop reflects the loss of confidence in Sri Lanka among foreign investors due to un-pragmatic, shortsighted and ad hoc macroeconomic fundamentals of the Yahapalana Government. 


“The Gotabaya Rajapaksa Government has made amendments to these disastrous policies with tax reforms, bringing down interest rates and introducing a slew of relief and benefits to investors. Budget 2020 which the government expects to present after the April general elections will offer a more investor-friendly agenda. Encouraged with new economic policies, low interest rate and strengthened rupee, I believe Sri Lanka will attract a considerable amount of FDI thus easing the debt servicing management and also reduce the debt service commitment in 2020 to lesser than USD 4.5 billion. 


“However, over the years, Sri Lanka has been able to maintain confidence among global financial agencies like the IMF, World Bank, ADB and international commercial banks by paying our debts on time and never to default,” he said.   

 

  • At the end of 2018, we lost Rs.34bn investments in our treasury bills and bonds
  • FDI by Dec. 31, 2019 stood a hopeless USD 600 million

 

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See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

 

 

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